Tag: cap-and-trade

In November, the California Chamber of Commerce filed a lawsuit challenging the legality of the revenues generated by the California Air Resources Board (CARB) for the state’s cap-and-trade greenhouse gas program. Today, we took action to join the suit. The NAM filed papers to intervene in the litigation, focusing not on the legality of the cap-and-trade program itself or the merits of climate change science, but on the extraordinary revenues generated by the auction and reserve sale provisions adopted by CARB.

The effectiveness of the cap-and-trade program comes from the state’s ability to ratchet down greenhouse gas emissions from year to year. CARB may not go beyond this authority to generate a huge income stream for the state. The first quarterly auction of greenhouse gas allowances in November raised nearly $289 million for California, substantially more than the $62 million required to implement the law. Moreover, that revenue is projected to increase to as much as $3 billion this year and $70 billion over the life of the program.

That income goes far beyond simply paying for the costs of administering the program, and thus exceeds the legal authority of CARB. Alternatively, even if the fees are authorized, they constitute a massive new tax that must be approved (but were not) by a 2/3 majority of the California legislature under the state constitution.

CARB’s income scheme will significantly raise energy costs in the state and further harm its competitiveness, providing limited or no environmental benefit.

A hearing in Superior Court in Sacramento County is scheduled for May 31.

Looking back over 2010, several companies, business associations and public interest groups racked up significant lobbying victories, despite going against the White House and powerful lawmakers in both parties.

1. U.S. Chamber of Commerce, National Association of Manufacturers, National Mining Association

Business groups like the U.S. Chamber of Commerce, the National Association of Manufacturers and the National Mining Association helped inflict a series of body blows to the big cap-and-trade bill that narrowly passed the House in 2009. The lobbying effort against the bill helped thwart one of the Obama administration’s three major legislative priorities, alongside the reforms of healthcare and financial services.

Cap-and-trade sputtered in the Senate amid resistance from Republicans and conservative Democrats. Senate Majority Leader Harry Reid (D-Nev.) did not even bring a scaled-back version from Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) up for a vote. Shortly after the GOP gains in the elections, Obama admitted that cap-and-trade would be off the table for years to come.

Thanks for noticing! Still, let’s remember that trade associations represent members. In the NAM’s case, that’s some 11,000 member manufacturing companies, other business groups and state organizations. It’s these members, speaking by themselves and through the NAM, who raised serious, legitimate and well-documented objections to the disastrous economic impact of cap-and-trade legislation.

And the NAM’s victories and defeats all come from exercising the Constitutional rights guaranteed to the people:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Jay Timmons, executive vice president at the National Association of Manufacturers, said Brown’s victory would give moderate Democrats pause about supporting the cap-and-trade bill that passed the House, as well as other initiatives viewed as building up the public sector at the expense of the private sector.

“It’s an extraordinarily clear message from the people of Massachusetts,” Timmons said. “If you couple that with the victories for Republicans from Virginia and New Jersey you’re starting to see a pattern: a none-too-subtle message to the administration to slow down.”

Sen. Byron Dorgan (D-ND) participated in a conference call on energy and national defense issues today, and a strong case was made for policies that encourage U.S. energy security and economic growth. Reuters spots this news:

WASHINGTON (Reuters) – U.S. Senator Byron Dorgan said on Tuesday he did not think the Senate would pass climate change legislation this year, but instead would focus on separate energy legislation that would require more electricity supplies to be generated from renewable sources and expand offshore drilling into the eastern Gulf of Mexico.

This is newsy because Sen. Dorgan is making a prediction AND he’s a member of the Senate Democratic leadership. More coverage …

The paper, produced in collaboration with Commonwealth Consulting Corporation, led by Col. Martin Sullivan, USMC (Ret.), concludes that there is no credible evidence that expanded oil and natural gas exploration and development in the Eastern Gulf would adversely affect military missions in that area.

Specifically, the report examines earlier claims of potential impacts (which were made prior to the Defense Department putting into place systems to evaluate such claims), assesses rates of usage by the United States military in the affected areas, explains current methods of controlling airspace and surface actions in the Gulf, and analyzes encroachment factors. It concludes that the Pentagon until very recently had no systematic tools for measuring the effect outside factors had on training and testing, and now that those tools are being put into place, they are clearly showing that oil and natural gas production will not encroach on the military missions in the Gulf.

Nice piece in the Pittsburgh Post-Gazette by columnist Len Boselovic on how the reformist zeal of the Obama Administration creates uncertainty and anxiety in the business community. From “Business: Rules of the game have changed“:

[There] is no doubt a host of new laws and regulations are coming that businesses will have to respond to. Uncertainty over what the new rules will look like is fueled in part by the biblical proportions of some of the proposals, including the 2,000-page plus health care reform measure.

“Who knows what’s in that law when it passes because it’s like 30 pounds and inches thick,” said Don A. Linzer of Schneider Downs, a Downtown firm that counsels clients on accounting, tax and other issues.

National Association of Manufacturers President John Engler has read enough to know he doesn’t like it.

“This bill raises costs for manufacturers at a time they can’t afford it,” the former Michigan governor said of the Senate proposal.

Also adding to the apprehension for business and discouraging investment are the bills to control greenhouse gas emissions and further regulate the financial sector.

Pat Kiely, president of the Indiana Manufacturers Association, makes the case in The Indianapolis Star that manufacturing helps define what it means to be a Hoosier, and that definition is put at risk by ill-considered, far-reaching climate legislation.

Developing countries such as China and India are unwilling to curb emissions of greenhouse gases. If increased energy costs drive manufacturing from Indiana to developing nations that do not restrict greenhouse gas emissions, then there is no reduction in emissions and we have done nothing to achieve the purported goal of fighting climate change. While it does appear noble that the United States would demonstrate leadership to the world in regulating itself, the downside has lasting economic hardship to the nation’s economy and to states like Indiana.

The Indiana Manufacturers Association’s membership understands the importance of environmental stewardship. That said, the method of control is critical. States have different needs based on their overall production of greenhouse gasses — be it from production of energy, agriculture, manufactured goods or transportation-related factors. It seems the federal government should work first to resolve our domestic imbalances before offering to give foreign competitors billions of dollars that we don’t have to take American jobs.

A: I’ll just give some candidates; the market is going to tell us. The electric car could be one. We’re a perfect place for it. . . . Wind energy is another.

We must never walk away from the manufacturing base that’s made us strong.

Daniels says he cannot fault the President and Congress’ efforts to stimulate the economy, although he wishes the stimulus bill had included more infrastructure and fewer pet projects. As for the rest of the Administration’s economic agenda:

I think the health-care bill is not only a terrible distraction from jobs and what really matters right now, but it would be a crushing blow to small business, just very ill-advised. I really hope Congress will step back from it.

Cap and trade (to cut carbon emissions) is just simply a disaster. It’s senseless. Even if — we don’t know this, we don’t — but even if manmade activity may someday in decades raise the world’s temperature, this bill won’t affect that. It will impose enormous costs. It’ll double utility rates in this state.

CNN ran a very good report on Thursday’s “CNN TONIGHT” on the EPA’s proposed endangerment finding and the economic impact of government programs to restrict carbon dioxide. Included in the report was a video segment with NAM’s Keith McCoy and Jason Speer of Quality Float Works of Schaumburg, Ill. From the transcript:

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Quality float works has been around since 1915. Making metal float balls used on flagpoles, weather vanes, plumbing and industrial devices. Over the years, company executives have been working hard to reduce their carbon footprint, recycling used oil, reducing their EQs (ph) and buying more fuel efficient equipment.

Still the company’s Vice President, Jason Speer is worried about new environmental regulations that could be in the making. This week the Environmental Protection Agency declared greenhouse gases a danger to public health, paving the way to regulating carbon dioxide emissions. Issuing its finding, the EPA said, quote, “Science overwhelmingly shows greenhouse gas concentrations at unprecedented levels due to human activity.” But Speer says if the EPA imposes new regulations, it could cripple his company.

JASON SPEER, QUALITY FLOAT WORKS: Manufacturing is an energy intensive business, and you know, every little penny counts right now and this environment, you know, we are trying to compete internationally. With some of these regulations, it hinders our ability to compete globally.

SYLVESTER: Many in the business community lead by the U.S. Chamber of Commerce and the National Association of Manufacturers oppose agency regulation under the Clean Air Act.

KEITH MCCOY, NATIONAL ASSOCIATION OF MANUFACTURERS: The Clean Air Act is not designed for this type of action so you’re really taking a square peg and hammering it into a round hole. If they’ll do it, it will be done probably with great pain to manufacturing.

PROF. GILBERT METCALF, TUFTS UNIVERSITY: I think the job loss is very much overblown. If we start with a kind of modest policies that are embodied in either the House or the Senate.

That’s not really a very comforting assurance from the Tufts academic, even if he’s right: Outside of the industry that creates 9 million jobs and accounts for 7.5 percent of the U.S. GDP, it’s no big deal.

The report followed with a discussion on the economic consequences with Margo Thorning of the American Council of Capital Formation and Fred Krupp of the Environmental Defense Fund.

The world’s top two greenhouse-gas-producing countries for the first time offered specific targets for controlling their emissions, but their broad promises ahead of a United Nations climate summit merely set the terms for a high-stakes struggle over money and future economic growth.

The NAM is cited:

The National Association of Manufacturers said Thursday in a statement that it wants additional details on the Obama administration’s pledge: “As we evaluate this proposal, we will do so with an eye toward its impact on American jobs, our economic recovery and long-term growth.”

While President Obama and congressional leaders say they would like to do more to spur job creation, economists and business executives warn that their plans to impose new health care and climate-change costs on corporations would have the opposite effect.

The initiatives, according to this analysis, are likely to overwhelm any positive impact on jobs from stimulus measures by giving businesses a reason to keep laying people off.

Seems painfully obvious. Or prospectively painful, obviously.

The NAM’s John Engler is quoted on taxes included in the health care legislation:

While President Obama and congres — sional leaders say they would like to do more to spur job creation, economists and business executives warn that their plans to impose new health care and climate-change costs on corporations would have the opposite effect.

The initiatives, according to this analysis, are likely to overwhelm any positive impact on jobs from stimulus measures by giving businesses a reason to keep laying people off.